Managers of pension funds in Ghana risk a showdown with contributors as their resolve to consider government’s new debt restructuring offer has incurred the wrath of labour.

The Finance Ministry has asked that the Chamber of Corporate Trustees to obtain the approval of contributors for the new offer.

Government is proposing a five percent payment of coupon in cash for 2023 and 2024 with the remainder capitalised as two bonds.

Meanwhile, the University Teachers Association of Ghana (UTAG) and Labour have rejected the government’s new proposed debt restructuring offer, which includes pension funds.

But the Executive Secretary of the Chamber of Corporate Trustees, Thomas Kwesi Esso says a technical team is analysing the offer to determine the impact of this on the bonds.

He explained that the objective of the analysis is to ensure that the bonds the pension funds hold will continue to be liquid and tradable at any point in time.

He added that “one of the objectives is to ensure that our pension contributors do not lose anything on their contributions even if it is a proposed alternative offer or debt exchange programme.”

According to Mr Kwesi Esso, the contributors are currently calculating the impact of the new offer on their portfolios, and the final decision will be made in a meeting soon to determine the industry's position.

Labour however maintains that considering the new offer is not an option.

According to the Deputy Secretary General of the Trade Union Congress (TUC), Joshua Ansah the managers of the pension funds cannot take a decision without consulting the contributors.

He added that making a decision without consulting with labor will not bode well for any labor union in the country.

“One plus one is equal to two and if you take one out of one, it is equal to zero so as for money, it doesn’t need any technical eye before you can see that somebody is using your money wrongly or correctly,” he added.

Meanwhile, the Individual Bondholders Forum backs this view and wants government to show commitment to fiscal discipline and cut down on what it says is reckless expenditure.

According to its convenor, Senyo Hosi, if government takes this path, labour unions will support it.

“You owe people you can’t pay but you are sitting there spending their money on their face, it is a bit insulting … go to the British Embassy, you will see the flight the staff fly, most of them fly economy but the Ghanaians won’t fly economy everybody business class. Show something; this business class nonsense must stop! ...”